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    Crestwood Midstream 3Q13: Merger Done, Pedal to Marcellus Metal

    In early October, Crestwood Midstream and Inergy Midstream completed their mega-billion-dollar merger (see Crestwood/Inergy Complete Their Merger Today, Worth $8B). Yesterday the newly merged company which kept the Crestwood Midstream name, issued their third quarter operations and financial update. Robert G. Phillips, Chairman, President and CEO said with the merger now behind them, it’s (our words) pedal to the metal, full speed ahead. Phillips is really excited about the company’s prospects for growth in the Marcellus Shale and said so yesterday.

    Phillips said by the end of 2013 Crestwood gathering capacity in the Marcellus will hit 500 million cubic feet per day (Mmcf/d), which is a 25% increase from the end of 2012. By the end of 2014, he expects their Marcellus gathering capacity to grow to 750 Mmcf/d, up another 50%. Yes indeed, Crestwood is high on the Marcellus!…
    Read More “Crestwood Midstream 3Q13: Merger Done, Pedal to Marcellus Metal”

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    Atlas Resource 3Q13: Production Up, Losses (Way) Up Too

    Atlas Resource Partners is a Pittsburgh-based exploration and production (E&P) company with active drilling operations not only in the Marcellus/Utica region but another four resource plays as well. Production for the company has gone up–way up–in 3Q13 thanks to newly acquired acreage and operations, but also due to more wells going online in the Marcellus/Utica. However, the company’s financials continue to be troubled. They show a net loss of $39.7 million for 3Q13–which is almost 4x the loss for the same period last year.

    Revenue was up for Atlas in 3Q13 (that’s a good thing), but costs and expenses rose even more (that’s a bad thing). Selected portions of the Atlas 3Q13 update:
    Read More “Atlas Resource 3Q13: Production Up, Losses (Way) Up Too”

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    MarkWest to Build 5th Cryo Plant in WV Courtesy Antero Resources

    MarkWest Energy continues its Marcellus/Utica infrastructure expansion. In an announcement yesterday, MarkWest said they will build a fifth (!) 200 million cubic feet per day cryogenic gas processing plant at its Sherwood (Doddridge County), WV facility. In the latest edition of the Marcellus and Utica Shale Databook (2013 Volume 2), MDN lists all of the projects announced by MarkWest and others (111 projects in all). This one is brand new and would be 112. MDN estimates this new cryogenic processing plant along with two others currently under construction at the Sherwood complex cost in the neighborhood of $200 million each to build.

    Cryogenic plants separate natural gas liquids (NGLs, or “wet gas”) from methane (“dry gas”). Why a fifth plant at the same facility? It’s being built at the request of Antero Resources. MarkWest signed a deal with Antero to provide them with wet gas processing capacity at the plant. MarkWest says the new plant will be built and online by third quarter of 2014. When it goes online, the total processing capacity at the Sherwood complex will be 1 billion cubic feet of natural gas per day–a really astonishing number. Here’s the MarkWest announcement:
    Read More “MarkWest to Build 5th Cryo Plant in WV Courtesy Antero Resources”

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    PA DEP Sec. Abruzzo Announces Winners of $3M in CNG Grants

    Part of the Pennsylvania Act 13 law, passed in early 2012, is a provision called an “impact fee” collected from Marcellus drillers (ultimately from landowners, because fees and taxes are always passed down the line). The first year the fee was collected it brought in over $200 million. The so-called fee is really 60% fee and 40% tax, as we’ve written about many times before. Why? Because 60% of the money collected stays in the communities impacted by drilling–for use with first responders, roads, etc. The other 40% is what MDN calls “walking around money”–money that’s spent by politicians in Harrisburg to curry favor with voters (i.e. vote buying). A lot of that money goes to southeastern PA (Philly area) where there is no drilling–but such was the sleazy political price to be paid in order to pass the legislation. Yes it stinks–but it is what it is.

    If there’s any good use for a teeny tiny sliver of the 40% walking around money, it happened yesterday in Scranton, PA, where the PA Dept. of Environmental Protection (DEP) Sec. Chris Abruzzo was on hand at the Cabot Oil & Gas’ “CNG Celebration” event at Johnson College (see our companion story today about the event). Abruzzo was there to announce the list of grant winners who will share in $3 million of Act 13 money to purchase, refit or supply filling stations for vehicles to run on compressed natural gas (CNG). By handing out this seed money, Gov. Tom Corbett hopes to encourage more companies and organizations to switch to cheaper and much less polluting natural gas as a power source. Below is the DEP announcement and list of winners of this year’s grant. The DEP will be back next year with even more money to award. They start accepting applications on Saturday…
    Read More “PA DEP Sec. Abruzzo Announces Winners of $3M in CNG Grants”

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    Cabot’s Big CNG Celebration at Johnson College in Scranton, PA

    Yesterday Cabot Oil & Gas held a “CNG Celebration” at Johnson College in Scranton, PA. Unfortunately MDN could not be on hand to help celebrate. However, we do have a couple of stories to bring you from that event.

    The purpose of the event was several-fold: announce Johnson College’s curriculum expansion with new courses in compressed natural gas (CNG) technology and eventually a certification (with financial and technical assistance from Cabot); PA DEP Sec. Chris Abruzzo was on hand to announce $3 million in grants to businesses and organizations to purchase or retrofit vehicles to run CNG (see our companion story today); welcome the Marcellus Shale Coalition’s new executive director, David Spigelmyer; and show off some impressive big trucks and other vehicles running CNG. “Celebration” is an appropriate word that about covers it!…
    Read More “Cabot’s Big CNG Celebration at Johnson College in Scranton, PA”

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    Chesapeake’s Lawler Says 3Q13 was “Transformational” for Company

    Transformers - DecepticonsChesapeake CEO Doug “the ax man” Lawler said the company had “an exciting third quarter” (tell that to the families of 1,200 people now out of a job), and that the company saw a “significant transformation and the implementation of a new strategy for Chesapeake” during the past quarter. That’s certainly a true statement. The numbers for the company have improved over a year ago, which will be music to the ears of Lawler’s boss corporate raider Carl Icahn (and will fatten Icahn’s bank account when he sells in the next year or two, sleazeball).

    Yesterday Chesapeake issued their third quarter operations and financial update, accompanied by a phone call with select analysts who asked puff questions of Lawler and former Aubrey McClendon “friend” and CFO Nick “Dom” Dell’Osso. One bit of good news amongst all the hot air issued yesterday: Chesapeake’s Utica Shale production went up a dramatic 91% from 2Q13 to 3Q13, as pipelines and processing plants have come online. According to Lawler, that trend will continue into 2014 as more infrastructure comes online…
    Read More “Chesapeake’s Lawler Says 3Q13 was “Transformational” for Company”

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    Rex Energy 3Q13: Continued NE Expansion, Including Upper Devonian

    As the third quarter reports continue to flood in, we have an update from Rex Energy, one of our favorite smaller (but important) Marcellus/Utica Shale drillers. Rex Energy, an independent exploration and production (E&P) company headquartered in State College, PA issued their 3Q13 update on Tuesday, and company leaders conducted a phone call with analysts yesterday. Among the important gleanings: Rex is doing interesting and important drilling in the Upper Devonian Shale layer (above the Marcellus) with impressive results. They’ve reached almost 100 million cubic feet of gas production per day, a 39% increase over the same time last year. And Rex now has leases on 21,000 Utica Shale acres in Ohio.

    An interesting tidbit from yesterday’s phone call: Rex co-founder and CEO Thomas C. Stabley says one of the secrets of Rex’s success has been to develop “quality midstream solutions” in each of their core areas. Here is the 3Q13 update issued by Rex on Tuesday, followed by (some of) the phone call transcript from yesterday:
    Read More “Rex Energy 3Q13: Continued NE Expansion, Including Upper Devonian”

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    Halcon CEO Says No More S***** Wells in Northern OH Utica

    Drillers are still figuring out the Utica Shale–the best places to drill, and the best places to not drill. Sometimes the “don’t drill here” lessons are tough because each well drilled costs a lot of money ($8 million or more, typically). On an analyst call Tuesday to discuss third quarter results, Halcon Resources Corp. CEO Floyd Wilson used some salty language to describe where they don’t intend to do more Utica drilling, which is in northern Trumbull County, OH. Instead, he said they’ll concentrate their efforts on the southern part of the county where they have more leased acreage that he believes will yield a better result.

    Here’s a small portion of the phone transcript where Wilson talks about the Utica and where he definitely won’t be drilling again:
    Read More “Halcon CEO Says No More S***** Wells in Northern OH Utica”

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    1st NRG Inches Closer to Utica Drilling – Still Not There Yet

    1st NRG Corp. is a small-but-growing exploration and production company headquartered in Denver, CO. Their drilling program to date has been centered in Wyoming (coal bed methane drilling). For more than year 1st NRG has been saying “we’re gonna start drilling in the Utica, you wait and see” (our words). They issued a press release more than a year ago that said, essentially, they are interested in the Utica (see 1st NRG Corp Newest Entrant in OH Utica Shale). They then issued a release saying they had raised $7 million for Utica drilling (see 1st NRG Corp Gets $7M Loan to Begin Drilling in Utica, Other Plays), and another saying they were looking for more money to drill in the Utica (see 1st NRG Still Looking for $ to Drill 7K Acres in Utica Shale).

    It’s November and has been eight long months since the last press release–so it must be time for another. Lookie here, we have one! This time, however, there’s been a change. 1st NRG says they have “signed an agreement with a private energy company to participate in the development of prospective acreage.” That still isn’t “we’re drilling our first well,” but we guess it’s a half step closer. Here’s the latest press release that’s short on details and long on puffery and descriptions of the Utica…
    Read More “1st NRG Inches Closer to Utica Drilling – Still Not There Yet”

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    Sunoco Provides Brief Update on Mariner East/West Pipelines

    Sunoco Logistics is in the midst of spending over $1 billion on two pipelines to carry ethane (and propane) from the Marcellus/Utica region to markets where it can be processed and sold. One of those pipelines is the Mariner West pipeline, currently in testing and due to go online this month, which carries ethane all the way to Sarnia, Canada. The other is Mariner East which will carry first ethane and then propane to the Marcus Hook refinery in Philadelphia. Mariner East will go online in stages beginning in 2014.

    Both pipelines are extremely important to the Marcellus/Utica region. We have a brief update on both projects from Mike Hennigan, President and CEO of Sunoco Logistics, as delivered yesterday on an analyst phone call reviewing the company’s third quarter numbers…
    Read More “Sunoco Provides Brief Update on Mariner East/West Pipelines”

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    2014 Ben Franklin Shale Gas Contest – $100K in Cash Prizes!

    Calling all researchers, entrepreneurs and innovators working in the shale gas space in PA or WV: The Ben Franklin Shale Gas Innovation and Commercialization Center (SGICC) is back with another contest, this time with $100,000 in cash prizes to split between the four best shale gas-oriented innovations/new products/new service ideas. The “new” thing must be in development stage or recently launched to qualify. The 2014 contest will be the third year running that the SGICC has held this contest and is the largest purse so far (for the 2013 winners, see: Envelope Please: Winners of Shale Gas Innovation Contest are…).

    On a personal note, MDN editor Jim Willis had the opportunity to meet Bill Hall, director of the SGICC at Shale Insight in September in Philadelphia. Bill helms a terrific organization and this contest, over the past several years, has done fabulous work in helping to shine a spotlight on worthy, up-and-coming businesses that have gone on to make a difference in shale drilling in the northeast and beyond. Think of the SGICC contest as a cross between Shark Tank and American Idol–only a whole lot easier! Here’s the details for this year’s contest…
    Read More “2014 Ben Franklin Shale Gas Contest – $100K in Cash Prizes!”

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    Marcellus Companies Move Offices from Charleston to SW PA

    A few days ago MDN told you that county officials in some West Virginia counties, like Wood and Pleasants counties, believe drilling may be headed in their direction in the not-too-distant future (see Drilling Creeps Southward According to WV County Clerks). However, the reality on the ground right now is that there have been either no, or perhaps one or two, permits issued for horizontal (shale) drilling in Wood and Pleasants counties (stats come from the latest edition of the Marcellus and Utica Shale Databook).

    Another county even further south is Kanawha County, home of the state capitol Charleston. Kanawha has also seen a few permits, but little or no shale drilling yet. In the ramp-up of Marcellus and Utica drilling, a number of drilling-related companies established administrative offices in Charleston. But that’s now changing. Why?…
    Read More “Marcellus Companies Move Offices from Charleston to SW PA”

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    Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d

    record-breakingGulfport Energy, the #2 driller in the Ohio Utica Shale behind Chesapeake Energy, has drilled some of the most prolific wells in the Utica (see Gulfport’s New Utica Well Produces Mind-blowing 28.5 Mmcf/d!). According to Gulfport CEO James Palm on an investor call yesterday, the company continues their winning streak and has just bested their own record. Gulfport’s Irons 1-H well in Belmont County (Washington Township) is now officially their highest producing single gas well with an initial production (IP) of 30.3 million cubic feet of natural gas per day! These are astonishing numbers.

    In a phone call with analysts to discuss 3Q13 results, Palm had the following to say:
    Read More “Gulfport’s New Record-Breaking Well in Belmont Cnty – 30.3 Mmcf/d”

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    Gulfport Signed Up to Ship Ethane to Shell Cracker, If…

    Gulfport wants to send the ethane it produces in Ohio’s Utica Shale to Shell’s ethane cracker plant, if that plant ever gets built. Gulfport announced on their 3Q13 analyst call yesterday that they are one of the companies who signed on during Shell’s cracker plant open season, pledging to provide ethane for the new cracker plant. Problem is, the prospects that the plant will actually get built are increasingly in doubt (see Rumor Mill: PA Ethane Cracker Plant on Shell Chopping Block?). Even so, we guess it’s a good plan to be first in line when/if that plant opens.

    MDN friend Bob Downing from the Akron Beacon Journal chronicles a few more choice tidbits from the Gulfport 3Q13 analyst call yesterday, including Gulfport’s ethane yearnings, some smart strategies Gulfport is employing to sell their dry gas and wet gas, how pipeline locations influence their drilling decisions, and an inside look at how much it costs Gulfport to drill a single Utica Shale well…
    Read More “Gulfport Signed Up to Ship Ethane to Shell Cracker, If…”

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    New Condensate Pipeline Proposed from Ohio to Western Canada

    Here’s a new one for the Marcellus/Utica region: Unity Pipeline Company (a joint venture between Harvest Pipeline, which is Hilcorp, Somerset Gas Transmission, and Crossroads Pipeline, which is NiSource) has just launched an open season (a time for drillers to sign up) for a condensate pipeline that will stretch from the Marcellus/Utica in Ohio across the state into Indiana, Michigan, and all the way to western Canada. Condensate, sometimes called natural gasoline, is a hydrocarbon produced from “raw natural gas” when the raw gas temperature is dropped to a certain point. Condensate in the northeast is mainly found in the wet gas areas of eastern Ohio, southwestern Pennsylvania and the northern panhandle of West Virginia.

    Condensate is used to dilute (mix with) crude oil so the oil can more easily be pumped through pipelines. There’s plenty of condensate available in the Marcellus/Utica, and plenty of need in western Canada where they pump a lot of oil. It makes sense to get all that condensate from point A to point B–and that’s what the proposed Unity Pipeline aims to do. Here is the announcement from Unity about their plan to build a 380-mile “diluent” pipeline, a project they hope to have up and running by the middle of 2015…
    Read More “New Condensate Pipeline Proposed from Ohio to Western Canada”